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County, providers say more support needed to cover 'true cost of child care'

Erie County/Cornell ILR study on cost of child care
Erie County
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Tiffany Malone, CEO of ABC Learn and Childcare in Buffalo, speaks during a presentation in Buffalo during which Erie County and Cornell University released its findings on the "True Cost of Child Care."

Gov. Kathy Hochul’s proposed state budget for the next fiscal year includes an increase in child care subsidies. The Live Well Erie Emergency Child Care Task Force, pointing to a newly released report, suggests what the state has provided to date falls well short of meeting the actual cost of child care.

The Cornell University Industrial and Labor Relations Buffalo Co-Lab, in partnership with the Task Force, issued the results of their study last week. Among the findings, while New York State’s reimbursements to child care providers serving subsidized families are at the market rate, it covers less than three quarters of the real child care cost.

“We knew that it was far below the actual cost of care, but we didn't know how far, and it was important to study it, in order to find out exactly how far below the actual cost of care it was,” said Deputy Erie County Executive Maria Whyte. “The second reason why it was important to study this is because we fear that this fact, this delta between the actual cost of care and the market rate, this fact is contributing to a series of falling dominoes that have had and continue to have a serious, serious detrimental effect on the local and national economy.”

Another finding is a drop in child care workers in Erie County. The Bureau of Labor Statistics reports as of December 2020, there were slightly more than 3,100 individuals working for child care centers. Include self-employed at-home providers and that total is closer to 3,300. That number represents an 11% reduction in the local child care work force since 2019, a decline that was underway even before the COVID pandemic.

“We found that the primary reason for this exodus was that the low wages the child care workers are paid,” said Catherine Creighton, with the Cornell ILR Co-Lab. “This isn't because child care workers wanted to leave the industry. In fact, we found quite the opposite that child care workers are passionate, passionate about the work they do. They train for it. It's a career and they didn't want to leave. But when you're paid more money as a fast food worker than you are as a child care provider, they are forced to make these difficult decisions.”

According to the study, the average annual wage for full-time workers is just over $23,000, with a median hourly wage of $10.38. Three quarters of child care workers in the county make less than $15 per hour and more than half do not get health care from their employer. By comparison, just one-third of all workers in Erie County earn less than $15 per hour and only about one quarter of the overall workforce lacks employer-provided health care.

Then there’s the matter of reimbursements for children who receive day care with assistance of a subsidy. The issue, providers say, is that it’s not enough to cover the cost of care.

Tiffany Malone, CEO of ABC Learn and Child Care in Buffalo, says 95% of the families she serves are subsidized, but the current market rate for her reimbursement is about 69% of the actual cost of care.

“Because of low subsidized payments, my program struggles to pay teachers above minimum wage, with almost all of our employees qualifying for some form of social services systems,” Malone said. “Most of our teachers work second jobs in order to sustain the low wages create a workforce train force me to choose between classroom improvements and employee raises.”

Hochul, when presenting her proposed state budget for the next fiscal year, announced it includes an increase in child care investments to more than $1.4 billion. With New York State now holding extra cash courtesy of the American Rescue Plan, local governments are hoping Albany will be more generous and provide what they say is a more appropriate amount for child care.

Erie County’s current child care block grant is $26 million. Whyte says the county is asking for an additional $20 million to cover the actual cost of child care while giving its employees a pay boost. The study estimates full-timers should earn $25 per hour while part-timers should earn $20 per hour.

“I would love to experience a child care infrastructure that shifts us from surviving to thriving. If there's an increase to the market rate to 100% of the cost instead of the 69% we are currently receiving, I will be able to pay our teachers a living wage and offer a better benefits package,” Malone said. “I could attract and retain qualified teachers, boosting the quality of care offered and reducing employee burnout. I could update my classroom environment and materials, making sure our children have access to all the resources they deserve and need.”

While releasing the Task Force’s study, Whyte recalled an occasion in 2006, while she was county legislator and Hochul was Erie County Clerk. They were scheduled to appear at a weekend event, and Whyte's child care arrangements fell through, leaving her to bring her then toddler to the event. While speaking, her toddler wandered off mid speech. Hochul, she recalled, offered to follow the small child around the room so that she could continue delivering her speech. She recalled the occasion to praise Hochul and suggest that the current governor would be more understanding of working women's needs.

She also spoke of child care woes and their impact on the overall economy.

“We have extremely low wages for child care workers. And that has contributed to a child care worker shortage, a massive exodus of childcare workers out of the child care system. That has, in turn, contributed to child care centers closing, which means there are fewer child care spots available to working families, which means millions of women nationwide have dropped out of the workforce,” Whyte said. “And then suddenly, businesses report all over the country that there is a labor shortage and they can't hire workers. Businesses can't grow, and we have economic growth stalling. And then hard fought games for women suddenly start to slide back.”